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By Larry Luxner Uploaded on November 18, 2010

Last September, Bernardo Alvarez Herrera made headlines — but not the way he would have liked. Venezuela’s feisty ambassador here became an unexpected casualty in the escalating war of words between the Bush administration and one of its fiercest enemies, President Hugo Chávez.

On Sept. 11, Chávez — acting in solidarity with his socialist buddy in Bolivia, President Evo Morales — expelled Patrick Duddy, the U.S. ambassador in Caracas, only a day after Morales accused the U.S. envoy in La Paz, Philip Goldberg, of stoking anti-government violence there and kicked him out.

In revenge, the State Department gave Alvarez 24 hours to pack his bags and leave the country (his family was given 72 hours). It also booted Bolivia’s top diplomat here, announcing that “in response to the unwarranted action and in accordance with the Vienna Convention, we have officially informed the government of Bolivia of our decision to declare Ambassador Gustavo Guzmán persona non grata.”

But then a funny thing happened. Barack Obama became president, and within six months, the United States welcomed Alvarez back — thereby earning him a footnote in American history as the first foreign ambassador ever to be declared persona non grata by one U.S. administration, then have that unhappy status lifted by another one.

On the other hand, Bolivia’s Guzmán won’t be following Alvarez back to Washington anytime soon, if ever, as relations between Obama and Morales remain sour. Alvarez is also making history on a different, perhaps less dramatic level: With this issue, he becomes the first ambassador to appear three times on the cover of The Washington Diplomat (he’s also graced our May 2003 and September 2006 covers).

“We are living in new times,” Alvarez told us. “We value the decision that allowed Ambassador Duddy to go back to Caracas, and me to return here. This tells you that when there’s political will to move on, everything is possible.”

Duddy expressed similar sentiments during a July 4 speech in Caracas. “Our two national agendas share aspects such as energy, democracy, the rule of law, public health, environmental protection and the fight against international crime,” he told local reporters. “Venezuela and the U.S. have a lot of things to discuss. Hopefully, the reinstatement of ambassadors will facilitate this dialogue.”

Alvarez talked to The Diplomat last month over a hearty traditional Venezuelan breakfast at his official residence — in a wide-ranging, lively interview that touched on everything from the latest political crisis in Honduras to his own recent loneliness.

“This house seems so big without my family. I feel like a bachelor here,” joked the 52-year-old ambassador, whose wife and three children are still in Caracas, unsure whether to stay there or return to Washington for the moment.

During his forced exile in Venezuela, Alvarez didn’t exactly sit around doing nothing. Less than a week after his expulsion from the United States, Chávez asked Alvarez to head the Unasur mission to Bolivia — a regional effort by South American countries to resolve a bitter standoff between forces loyal to Morales and violent opposition groups.

“I spent almost a month and a half in Bolivia. Then I came back to Venezuela, and the ALBA countries decided to establish a bank,” said Alvarez, using the Spanish acronym for the Bolivarian Alliance for the Peoples of Our America, a leftist regional bloc created by Chávez as a counterweight to U.S. efforts to form a Free Trade Area of the Americas.

“Who could have imagined that this idea of Cuba and Venezuela, back in 2005 when they decided to create ALBA, would today include nine countries,” said Alvarez, proudly rattling off ALBA’s current membership list: Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Honduras, Nicaragua, St. Vincent and the Grenadines, and of course Venezuela.

Alvarez served for seven months as president of Banco del ALBA before unexpectedly getting his Washington ambassadorship back — a job almost everybody assumed would go to Roy Chaderton, Venezuela’s current envoy to the Organization of American States.

“Both countries wanted to speed up the process,” Alvarez explained. “And to do that, the easy way out was to just reinstate both ambassadors, without going through the process of hearings in Washington and Caracas. We just re-established full relations.”

Yet there’s clearly more to the story.

“Bernardo Alvarez comes from a very wealthy and traditional family, and he’s always been on the left. He’s a former congressman and petroleum vice minister, while Roy Chaderton is a career diplomat,” said a Venezuelan source who knows both men but asked not to be named. “In Venezuela, there’s far more respect for Alvarez than for Chaderton.”

The source added: “Neither one is in the Chávez inner circle. This was basically diplomatic protocol, where they revert to the original status quo and later make changes. I think Alvarez deep down knows a lot of the stuff they are doing is wrong, but he doesn’t break ranks. I wouldn’t be surprised if he is changed later.”

Alvarez, touting his own impeccable leftist credentials, told The Diplomat that he has absolutely nothing in common with members of Venezuela’s rich elite, who up until very recently controlled most of the resources in this oil-rich nation of 27 million.

“I might look like one of them, but I’m not,” he assured us. “I come from a very traditional but politically conservative family in Lara state, with a sense of social responsibility. My father is a doctor, and he’s dedicated his whole life to children and public health. My mother was the daughter of a newspaper editor, and a leftist. And my real political life started in leftist parties.”

The ambassador grew up in the city of Barquisimeto, located halfway between Caracas and Maracaibo, center of the country’s oil industry. He holds a degree in political science from the Universidad Central de Venezuela and a master’s degree in development studies from the University of Sussex in England.

Before coming to Washington in 2003, Alvarez was Venezuela’s vice minister for oil and gas — an important position in a country that derives 80 percent of its foreign exchange from petroleum exports. He arrived here only a year after plotters attempted but failed to overthrow Chávez, with tacit approval from then President George W. Bush.

“We had to face a really hostile administration, with all sorts of sanctions and campaigns against us. There were so many stressful moments,” he recalled. “During the Bush administration, it was impossible to do anything with them. Now there is a chance to rebuild, so the job is much more demanding.”

Alvarez says that this time around, he’s been received “very well” by the State Department, with which he’s had frequent consultations. Despite his expulsion, he’s even retained his seniority, becoming dean of Washington’s Latin American diplomatic corps with the recent departure of El Salvador’s Rene León, who was here for more than 10 years.

“We recognize the decision made jointly by Chávez and the Obama administration to move ahead,” Alvarez told us. “Venezuela’s influence in the hemisphere is growing, but we’ve been watching the administration closely. Although we’re basically hopeful, we are a bit concerned by the recent remarks made by [Secretary of State] Hillary Clinton.”

A bit concerned may be a bit of an understatement. In early July, Clinton met with two prominent anti-Chávez personalities: Alberto Ravell, owner of the rabidly oppositionist TV station Globovision, and Leopoldo Castillo, the host of a Globovision talk show and former Venezuelan ambassador to El Salvador.

In an interview later broadcast on that station, the secretary of state criticized the Chávez government’s recent crackdown on opposition media, telling her interviewer that “part of what we hope to see over the next months in Venezuela is a recognition that you can be a very strong leader and have very strong opinions without trying to take on too much power and trying to silence all your critics.”

Reaction from Caracas was swift and sharp. “In a moment in which efforts are being made to improve the relationship with the U.S. government, the secretary of state repeats the old practice of giving recipes and issuing evaluations of Venezuelan democracy,” the Ministry of Foreign Relations complained in an official statement. “Her insinuations reflect a profound lack of knowledge of our reality. It is difficult to believe in the sincerity of Washington’s intention to restore bilateral relations.”

Part of the problem is that, despite Obama’s efforts to reach out to Chávez, there’s still a great deal of distrust between the two countries. The Venezuelan leader’s frequent tirades against American imperialism, his name-calling and his sometimes childish antics (for example, his denunciation of President Bush as the devil at a speech before the U.N. General Assembly) have angered many political leaders throughout the region, not only in the United States.

In one memorable incident, King Juan Carlos of Spain told Chávez to “shut up” after he repeatedly insulted the country’s former prime minister, José María Aznar, during the 2007 Ibero-American Summit in Chile.

Chávez also trashed Colombian President Alvaro Uribe as “a liar and a cynic” during a particularly tense period in relations that led to a temporary freeze in diplomatic ties — tensions that have resurfaced again with a plan to increase the U.S. military presence in Colombia. Speaking on state television recently, Chávez said he is even placing Venezuela’s diplomatic ties with Colombia under review, calling the military proposal a “new aggression against us.”

So far, both Colombia and the U.S. seem to be ignoring Chávez’s bellicose rhetoric. Disdain of Chávez in fact runs deep throughout the United States. His reputation in Washington — and especially among many members of Congress — isn’t helped by his government’s official hostility toward Israel and a recent spate of anti-Semitic attacks in Caracas that has left Venezuela’s dwindling Jewish community afraid for their lives.

Likewise, Chávez’s warm friendship with Fidel Castro over the years has earned him the wrath of thousands of Cuban and Venezuelan exiles in Miami. Yet Alvarez — who first visited the island in 1978 as part of a youth delegation and has been back to Cuba dozens of times since then — says that the bilateral friendship is here to stay, whether the United States likes it or not.

In recent years, Alvarez noted, annual trade between Venezuela and Cuba has jumped from 0 million to billion, and Venezuela provides the communist island with 98,000 barrels of oil a day at subsidized prices. In addition, thousands of Venezuelan physicians got their medical training in Cuba, and more than 20,000 Cuban doctors are currently working throughout Venezuela.

“Cuba, as you know, is more of a domestic than an international issue for the United States,” the ambassador said. “Anytime something happens, powerful interests here align to stop any improvement. Cuba is not a military threat to the United States or its national interests.”

Alvarez said he hopes U.S. policy toward Cuba changes, but without preconditions, such as those that were imposed when the Organization of American States voted to rescind Cuba’s suspension — though only if it met standards on democracy and human rights. “Cuba is not asking to get back into the OAS, but it could participate in the Summit of the Americas,” Alvarez said. “Here we had a meeting in Trinidad, and the whole meeting was talking about a country that wasn’t invited.”

But Latin America’s flashpoint right now isn’t Cuba. It’s Honduras, where deposed President Manuel Zelaya is fighting to return home after he was forcibly removed in a June 28 military coup (see related story on the Organization of American States).

Venezuela has emerged as Zelaya’s leading protector, and many in the Chávez government have blatantly accused the United States and even Israel of orchestrating the coup to protect powerful business interests in Honduras from the leftist president.

“They will have to get to the bottom of how much of a hand the CIA and other imperial bodies had in this,” Chávez said the day after Zelaya’s overthrow, suggesting that his government would respond with military force if his envoy to Honduras was kidnapped or killed.

But Obama generally won praise for his initial condemnation of the coup, robbing Chávez of the name-calling opportunities he enjoyed with Bush. “Instead of engaging in tit-for-tat accusations, Mr. Obama calmly described the coup as ‘illegal’ and called for Mr. Zelaya’s return to office,” the New York Times wrote on July 1. “While Mr. Chávez continued to portray Washington as the coup’s possible orchestrator, others in Latin America failed to see it that way.”

But Alvarez told us that he thinks Washington should have condemned the coup in Honduras much more forcefully (the mediation has since been outsourced to Costa Rican President Oscar Arias). “This is a big prueba de fuego [trial by fire] for the Obama administration,” he said. “According to the standards of some people, it doesn’t matter too much whether you have been elected or not. Apparently, if you work for and comply with the rules and interests of the elite — and you allow the media to impose their agenda — you are a good democracy. But if you work for the excluded and the minorities, then you are seen as a bad democracy.”

The ambassador warned: “If we don’t re-establish Zelaya in government for the time he has left to serve, there will be devastating consequences. Anybody could then go and say what they want — for whatever reasons — even if the international community condemns it.”

Meanwhile, Alvarez is pouring all his efforts into improving U.S.-Venezuelan relations, particularly in the energy sector. Despite the bad blood between Washington and Caracas, Venezuela has remained one of this country’s top sources of foreign oil.

“We must re-establish our relationship in energy and get it back to where it was — a constructive dialogue between two very important countries. There cannot really be any comprehensive energy policy in the hemisphere without the United States and without Venezuela,” Alvarez said. “It’s not only the oil we provide the U.S., but also what we get from the United States.”

More than 55 percent of U.S. exports to Venezuela are in the automotive, communications and basic organic chemical sectors, while 95 percent of Venezuelan exports to the United States are in the oil, gas and petroleum refining sectors.

In 2008, according to embassy statistics, Venezuelan trade with the United States stood at billion, up from billion in 2007 and just billion in 2000. Three states alone — Texas, Louisiana and Florida — represent 67 percent of that commerce, though bilateral trade plummeted by 39 percent during the first quarter of 2009 because of the worldwide recession. Petróleos de Venezuela (PDVSA), the state oil monopoly, reported global operational revenues of 6.4 billion, and PDVSA’s contribution to the Venezuelan budget came to a whopping billion in 2008 — up billion from 2007 figures.

At present, Venezuela is the third-largest oil exporter to the United States, trailing Canada and Mexico, and a U.S. subsidiary of PDVSA owns 100 percent of Citgo, one of the nation’s largest gasoline refiners and retailers. But Venezuelan oil shipments to U.S. ports fell to 891,000 barrels a day this past April, their lowest level in 18 years. And sharply lower oil prices on the world market have forced Chávez to slash the 2009 national budget from .9 billion to .7 billion.

“The spending cuts will be achieved, in part, through the elimination of government spending considered to be superfluous, such as executive vehicles, government building acquisitions and renovations, and bonuses for high-level officials,” says an official embassy handout, insisting that “there will be no cuts in social spending or programs.”

According to Alvarez, that budget is now based on an oil price of per barrel, not as originally projected. “From the very beginning, we knew that prices of over 0 a barrel were not going to stay there. We also knew that prices were having a bad effect, creating a surplus of money in Venezuela,” he explained. “Fortunately, we have been saving money over the past few years, and we now have a fund with billion to keep investing in strategic infrastructure. We have had to make adjustments, but we are getting out of this crisis without suffering like countries that are more vulnerable.”

In the meantime, Alvarez’s more immediate focus will be mending the still wobbly U.S.-Venezuelan relationship. The envoy says he’s not bitter about having been kicked out of the United States, but hopes it doesn’t happen again.

“Over the years, I’ve been blessed with the opportunity of seeing America. I have traveled all around and have many friends and acquaintances here. I have seen the beauty, the poverty, the stressful America of people in need, and the big companies and technology. That tells you about the complexity of this country.”

Asked if Obama and Chávez might sit down and talk anytime soon, Alvarez said there’s no reason for them not to. “Why not?” he said. “Everybody was skeptical. Some people thought it would take months of lobbying, but look what they did. They met in a summit and solved would could have cost us months or years.”

But Alvarez suggested it will take a lot more than photo ops or presidential handshakes to overcome years of mutual distrust. A hint of what that entails can be found in the book Chávez gave Obama last April in Port of Spain: a Spanish-language edition of “Open Veins of Latin America: Five Centuries of the Pillage of a Continent,” by Uruguayan journalist Eduardo Galeano.

“Obama is one thing, but you must dismantle your Cold War mentality and this whole imperialist way of looking at the world,” Alvarez said. “Then the United States will have much more influence, because then it will be based on moral principles and cooperation.”